Russia Consolidates its Position in Iraq Upstream Petroleum

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Iraqi Ministry of Oil confirmed in late July that Russia’s Bashneft had accepted the ministry’s maximum acceptable remuneration fee (MARF) for exploration Block 12, which was offered in the fourth bid round that took place at the end of May (MEES, 4 June). This is in line with what I anticipated in my assessment of the results of the fourth bid round.

This ‘newcomer’ to Iraq post-2003 upstream petroleum would consolidate further the position of the Russian companies and strengthen their presence and role in the country’s oil production. This also manifests clearly a petroleum asset seeking strategy and demonstrates that there has been a learning curve from previous bid rounds.

The Russian position could be consolidated even further if the speculation about the possible entry of another Russian company, Rosneft, materializes – but Gazprom might rock the boat.

Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: [email protected]).